Some Fundamental Presuppositions for a Materialist Discussion
of Crisis Theory

I

A great shortcoming of the form in which the discussion of
crises took
place hitherto, especially m the circles of the left and far-left wings
of the workers movement, was to be found in their search for a
"revolutionary" crisis theory per se, just as in the middle ages one
searched for the philosopher’s stone. Historical examples,
however, can demonstrate quite easily that possession of such a
supposedly highly revolutionary crisis theory says little about the
actual level of class consciousness and revolutionary preparedness for
action of a group or individual believing in the theory, thus it is
well known that for thirty years, from 1891 to 1921, the Social
Democratic party of Germany had in the crisis section of the Erfurt
program an especially revolutionary crisis theory which even today can
hardly be improved on in respect of radical clarity. The Erfurt program
was not satisfied with tracing crises back to the "planlessness" or
so-called anarchy of the present capitalist mode of production-as its
first draft which was criticized by Engels still had done and as is
likewise today the case with the 1925 Heidelberg program accepted by
the SPD. Neither was it satisfied with lamenting the “ruin of
broad sections of the people” or the aggravation of the
torment
of the unemployed proletariat caused by these crises, Rather it
explained the crises as a phenomenon "founded on the nature of the
capitalist mode of production" which cannot be "overcome" through some
"planned economy" reforms of the capitalist mode of Production but can
only be superseded through the revolutionary cancellation (Aufhebung)
of this whole mode of production. The Erfurt program recorded as the
most significant effect of crises the fact that it is the crisis which
"further widens the chasm between the proprietors and the propertyless
workers," It asserted moreover with distinct clarity despite
the
"revisionist" tendencies already emerging then-that the crises thus
described "will ever widen in extent and destructiveness will raise
general insecurity to a normal condition of society and furnish the
proof that the forces of production have outgrown contemporary society
and that private ownership of the means of production has become no
longer compatible with their efficient application and full
development."

This contradiction between theory and practice becomes still
more
drastic when we cast our eyes towards some well-known individual crisis
theorists of pre-war Social Democracy. There is the subsequent
arch-reformist Heinrich Cunow who in 1898 in the Neue Zeit founded the
first explicit collapse and catastrophe theory. It was none other than
Karl Kautsky who in July, 1906, in the preface to the fifth edition of
Engels' Utopian and Scientific Socialism announced the directly
imminent "death crisis" of the capitalist system which "this time has
no chance ever again to be softened by a new era of prosperity on a
capitalist basis!" In the controversy over crisis and collapse theory
arising since 1913 from Rosa Luxemburg's book on The Accumulation of
Capital we find from the beginning reformists and revolutionaries on
both sides (among the followers inter alia Paul Lensch, among the
opponents Lenin and Pannekoek) , and even the two most important
present day epigones of Luxemburgian theory, Fritz Sternberg and Henryk
Grossman, can hardly be described as especially determined and
efficacious representatives of a practical revolutionary politics.

In the immediate post-war period the apparently unavoidable
and already
commencing collapse of the capitalist system on a world scale awoke
unfounded illusions among a wide section of revolutionaries. At this
time, the then "left Communist" theoretician Bukharin had already
collated fantasies for a new scientific theory of this supposed
capitalist destruction of the world in his notorious Economics of the
transition period. But the revolutionary practitioner Lenin coined the
revolutionary phrase - later to be repeated by his followers ad
infinitum under quite different conditions, but during the conditions
prevailing then revolutionary in its effect - that "there is no such
thing as a situation with no way out for capitalism."

II

The various crisis theories that have hitherto emerged in the
worker's
movement are in reality much less of an indication of the revolutionary
class consciousness and capability for action achieved by their
originators and followers than a passive and belated reflection of the
objective reality of the ongoing crisis like total condition of the
capitalist mode of production or even of only a temporary economic
crisis. One could from this viewpoint represent the whole historical
development of socialist crisis theories from Fourier and Sismondi to
the various subsequent temporal phases of Marx-Engels and the later
Marxists (and the crisis theories of the Marx epigones up to Sternberg
and Grossman, Lederer and Naphtali), right into their ultimate
theoretical details, as merely a passive reflection of the respective
previous objective economic development. From the same viewpoint one
could also, beyond the framework of crisis theories, represent all the
important struggles over direction which have arisen within the
socialist movement during the last fifty years as mere consequences and
reflexes of the immediately preceding conjuncture within the capitalist
crisis cycle.

A lot of noise has been made about the question as to whether
the old
Engels in the introduction to Marx's essay on class struggles in France
had surrendered a part of the revolutionary political basic
propositions of original Marxism. One can better pose this question
with regard to certain remarks of Engels in the preface to the German
edition of the Poverty of Philosophy (1884) (p. xviii) and in a
footnote (no. 8) to the third volume of Capital (1894, 11, p. 27). Here
there is talk about a recently quite changed character in the cycles of
modern industry and about the removal or strong decline of "most of the
old crisis-points and circumstances for crisis formation." It is quite
possible that these remarks of Engels constituted the first ideological
reference point of that theory, seemingly only represented by
Bernstein's revisionism at the turn of the century, but today already
quite openly represented by all Social Democratic doctrinal experts,
which saw the task of the socialist workers' movement no longer as that
of exploiting the crisis for increased struggle for the revolutionary
overcoming of the capitalist mode of production, but rather as that of
weakening down and "subduing" such crisis within the framework of
capitalist mode of production. Of course Friedrich Engels was far
removed from such conclusions; the replacement of the previous
crisis-cycles by a "new form of equilibrium" forecast on the basis of
the conditions of the previous two decades he termed, on the contrary,
a transition to "chronic stagnation as the normal condition of modern
industry." He thereby not only became the direct originator of crisis
theory of the 1891 Erfurt program discussed above, but also became the
real father of the notion of the so-called death crisis which, as
pictured already at the Erfurt congress by Wilhelm Liebknecht, and
later by Cunow, Kautsky and many others, was to drive contemporary
society with an "iron logic" into a "catastrophe, into its own
unavoidable doom."

Things developed differently when the stagnation already
declared
"chronic" by Engels turned in the mid-nineties into a new immense
upswing of the capitalist mode of production. Edward Bernstein then and
later said publicly that it was these new economic facts which at this
time brought about his fundamental attack on all revolutionary elements
of hitherto existing Social Democratic politics and caused him, in
particular with regard to crisis theory, to categorically state that
due to the latest development of the capitalist system "general
business crises after the fashion of earlier ones are now to be
regarded as unlikely, at least for a long time."

From Bernstein's remarks, and the theoretical and practical
consequences already deduced thereupon by its originator, a straight
line leads to the official Social Democrat crisis theory as represented
for and by Hilferding and Lederer, Tarnow and Naphtali. I term this
fundamental stance of today's Social Democrat crisis theory as the
subjective stance in contrast to both of the other two fundamental
stances to the crisis problem still to be discussed. The Social
Democratic theory states that in modern "organized capitalism," whether
actual or "tendential," necessary and unavoidable crises will not occur
anymore. The first "scientific" argumentation or proof for this thesis,
at first only set up by Bernstein as a factual assertion, is contained
in the familiar theory of Hilferding's "Finance Capital." It forecasts
the overcoming of capitalist crises by a capitalist "general cartel" to
be created by and with the acceptance and support of the working class,
which will carry through the planned regulating of bourgeois
production, based on capital and wage labour. After the war (1927)
Hilferding declared once more expressly that he always had "rejected
every economic theory of collapse." The fall of the capitalist system
"would not emanate from the intrinsic laws of this system" but would
have to be "the conscious deed of the working class."

This "theory" of Hilferding is until this day the basis of not
only the
Social Democrats-but also that of the Bolshevist-Soviet theoreticians
and plan-engineers and others advancing subjective and voluntaristic
crisis theories and theories for overcoming such crises. One must not
think however, that these theories, modulations of which echoed still
some years ago through a whole forest of Social Democrat journals and
books, have for their originators and followers been "proven false" by
the farts of the existing capitalist reality. Experience has shown
that, for instance, Edward Bernstein still adhered to his thesis of
crisis-overcoming designed in 1899, when in the following year, 1900,
the economist crisis broke out, and a further crisis followed seven
years thereafter; and again when seven years later the already then
noticeable new crisis was only deferred by the world war only to
reoccur once again in 1920-1921 on a world scale, after the first
liquidation of the war and its direct results. The Hilferdings and
Lederers, Tarnows and Naphtalis will react quite like that, yesterday,
today and tomorrow. It is just the characteristic of this kind of
crisis theory that they always ideologically reflect the just past
phase of the real movement of capitalist economies and place it
vis-à-vis the changed present reality as a fixed rigid
"theory."
Of course there are a host of other excuses, like the explanation of
the current world economic crisis as result of wars, as result of
reparation and war debts and other "extra-economic" causes. The
practical consequences of all of these crisis theories based on this
subjective fundamental stance is the complete destruction of all
objective bases of the proletarian class movement. The Goerlitz Program
of Social Democracy of 1921 has coined already the classical phrase for
this position by declaring the class struggle for the liberation of the
proletariat as a mere "moral demand."

But even the other fundamental stance to the crisis questions
that is
almost directly opposed to the one we just investigated-which in the
perfection of the almost classical form of the accumulation theory of
Rosa Luxemburg has found expression unrivalled by any of the numerous
predecessors and successors - can not be recognized as a truly
materialist, and, as regards its practical efficiency, revolutionary
position on the crisis question. The significance of the theory, as
espoused by its followers, lies in Rosa Luxemburg's position of
"holding fast to the fundamental thought of 'Capital,' of an absolute
economic limit for the continued development of the capitalist mode of
production, in conscious contrast to and protest against the attempts
of distortion by the New-harmony theoreticians" (Grossman). The stance
based on this theory could appropriately be described as an absolute
one, I should like to characterize it in contrast to the already
discussed "subjective" and the still to be discussed "materialist"
stance, as an objective or "objectivist" fundamental stance. It is of
no consequence here, from which assumed objective system of laws of the
capitalist mechanism of production the objectively guaranteed economic
necessity of its imminent collapse is derived in detail. On the other
hand, nothing will change the "objectivism" of these theories not even
their followers' assurance that they are not at all recommending to the
proletariat "a fatalist awaiting of the automatic collapse," but "only"
(!) are of the opinion that the revolutionary action of the proletariat
"achieves the conditions for successfully defeating the resistances of
the dominating class only through the objective tremors of the existing
system" (Grossman). Such a theory of all objectively given economic
tendency of development whose ultimate goal can be grasped in advance
employs pictorial notions rather than unequivocally determined
scientific concepts. Furthermore, it is founded inevitably on
insufficient induction and appears to me as not suitable for bringing
forward that full earnestness of self-disciplined activity of the
proletarian class struggling for its own goals, which is as much
necessary for the class war of the workers as it is for every other
ordinary war.

In contrast to the two fundamental stances so far illustrated,
it
appears to me that a third fundamental stance to the crisis question is
possible and just this one alone deserves the designation of a truly
Marxian materialist stance. This position explains the question of the
objective necessity or avoidability of capitalist crises as a senseless
question in this general form (within the framework, of a practical
theory of the revolution of the proletariat). It agrees, with the
revolutionary critic of Marx Georges Sorel who will not consider Marx's
general tendency of capitalism to catastrophe generated by the
insurrection of the working class - colored in a strong
idealist-philosophical “dialectical” manner of
speech- as a
valid scientific prognosis, but merely as a myth whose sole
significance is limited to determine the current action of the working
class. The materialist stance is, however, not in accord with Sorel
when he quite generally wants to limit the function of any future
social theory of revolution to form such a myth. The materialist stance
rather believes that certain, if only always limited, prognostic
statements sufficient for practical action can be made on the basis of
always, more exact and thorough empirical investigation of the present
capitalist mode of production and its recognizable immanent tendencies
of development. The materialist therefore investigates thoroughly the
given situation of capitalist production including the contradictions
found therein, among which are also the situation, the level of
consciousness, the organization, and the readiness for struggle of the
working class and all the various levels of the working class in order
to determine its action, The most important basic traits of this
theoretical and practical materialist fundamental stance have been
classically formulated, in general form, without being specially
related to the crisis problem, in, the polemic of the year 1894 where
the young Lenin attacked the subjectivism of the popular revolutionary
Michailowski together With the objectivism of the then leading
Marxist theoretician Struve and confronted both with his own
activist-materialist standpoint: "When proving the necessity of a given
number of facts, the objectivist always runs the risk of assuming the
standpoint of an apologist of these facts; the materialist reveals the
class contradictions and thereby establishes his standpoint."